James D. DeVries
ADTAbout James D. DeVries
James D. DeVries, age 62, is ADT’s Chairman of the Board, President, and Chief Executive Officer. He joined ADT in 2016 as EVP & Chief Operating Officer, became President in September 2017, CEO in December 2018, and Chairman in 2023; he holds a BA from Trinity International University, an MA from Loyola University, and an MBA from Northwestern Kellogg . Under his leadership in 2024, ADT delivered 5% year-over-year revenue growth, Adjusted EBITDA of $2,578 million, and record customer retention with end-of-period RMR of $359.5 million; the company returned $182 million in dividends and repurchased 31 million shares for $241 million . Pay-versus-performance disclosures show 2024 total shareholder return (“TSR”) of $97 on a $100 initial investment, Net Income of $501,053 thousand, and Adjusted EBITDA of $2,578,195 thousand .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Allstate Insurance Company | Executive Vice President of Operations; Executive Vice President & Chief Administrative Officer | Not disclosed | Oversaw real estate & administration, HR, and procurement |
| Principal Financial Group | Executive/management roles | Not disclosed | Leadership roles in financial services; details not disclosed |
| Ameritech | Executive/management roles | Not disclosed | Details not disclosed |
| Quaker Oats Company | Executive/management roles | Not disclosed | Details not disclosed |
| Andrew Corporation | Executive/management roles | Not disclosed | Details not disclosed |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ABM Industries Inc. | Director | Current | Board-level oversight at integrated facilities solutions provider |
| Amsted Industries Inc. | Lead Director | Current | Governance leadership at diversified industrial components manufacturer |
| HR Management Association of Chicago | Board member | Past | Human capital network engagement |
| Chicago Public Library Foundation | Board member | Past | Community and philanthropic governance |
| Boys & Girls Clubs of Central Iowa | Board member | Past | Community service governance |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $1,124,786 | $1,164,154 (3.5% increase) |
| Target Bonus (% of Base) | 150% (set Feb 2023) | 150% |
| Actual Annual Incentive Paid ($) | $1,501,589 | $1,658,919 (95% of target) |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout Basis | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA ($MM) | 50% | $2,577 | $2,578 | 100.05% of target; contributes 51% weighted performance | Non-GAAP metric defined in CD&A |
| Ending Recurring Monthly Revenue (RMR) ($MM) | 50% | $361.5 | $359.5 | 99.45% of target; contributes 44% weighted performance | Subscriber-based revenue measure |
| Total AIP Payout | — | — | — | 95% of target (CEO payout $1,658,919) | Annual cash incentive; no discretionary adjustment in 2024 |
2024 LTIP structure and grants:
- Form: Non-qualified stock options vesting one-third annually, 10-year term, exercise price equals grant-date close; 2024 grants only options (no RSUs) to increase alignment with shareholder value creation .
- CEO 2024 grant: 3,755,760 options; grant date fair value $9,652,303 .
Equity Ownership & Alignment
Beneficial ownership and breakdown (as of March 26, 2025):
- Total beneficial ownership: 10,395,401 shares and vested options (Common + vested options), representing ~1.3% of Common Stock and ~1.2% of total (Common + Class B) .
- Held indirectly: 3,006,340 shares and 5,983,345 options via Bethel Ventures LLC (manager/member: DeVries) .
- Stock ownership guidelines: CEO required minimum ownership of 6x base salary; options do not count toward compliance; status not disclosed .
Outstanding equity and vesting cadence (Dec 31, 2024):
| Instrument | Quantity | Status | Strike | Notes |
|---|---|---|---|---|
| Options (Top-Up, Tranche B) | 387,853 | Unexercised, performance-based | $13.30 | Legacy awards performance condition deemed satisfied in 2024–2025; accounting modification expense recognized (no cash grants) |
| Options (IPO) | 288,865 | Exercisable | $13.30 | Fully vested |
| Options (CEO promotion 2018) | 1,000,000 | Exercisable | $8.49 | Fully vested Dec 1, 2021 |
| Options (2019) | 1,076,555 | Exercisable | $5.48 | 3-year ratable vest |
| Options (2020) | 1,202,458 | Exercisable | $5.27 | 3-year ratable vest |
| Options (2024 LTIP) | 3,755,760 | Unexercisable (time vest) | $6.51 | Vests ~1/3 annually on first three anniversaries |
| RSUs (unvested) | 809,313 | Unvested | — | Market value $5,592,353 at $6.91 close (12/31/24) |
| Distributed Shares (performance-based) | 559,597 | Unvested | — | Payout value $3,866,815 (as of 12/31/24) |
Vesting schedules:
- RSUs: 260,434 (incl. DEUs) vested March 2, 2025; 548,879 (incl. DEUs) vest in two equal tranches on March 1, 2025 and March 1, 2026 .
- Options (2024 grant): vest ~one-third per year over three years from March 8, 2024 .
In-the-money status vs $6.91 closing price (12/31/24):
- In-the-money: 2019 options at $5.48; 2020 options at $5.27; 2024 options at $6.51 (theoretical intrinsic value per option equals $6.91 minus strike) .
- Out-of-the-money: $8.49 and $13.30 strike tranches at $6.91 close .
Trading policies and pledging:
- Insider trading policy requires pre-approval, limits trading to “open windows,” permits Rule 10b5-1 plans with cooling-off periods; hedging, short sales, and pledging are prohibited (grandfathered pledges permitted from July 2021) .
- No personal pledges disclosed for DeVries; Apollo has pledged 278,650,366 ADT common shares under a non-recourse margin loan (loan-to-value ~5.2% as of March 11, 2025); overhang and default remedies noted by company; ADT is not party to the loan .
Stock vested in FY2024: 1,291,752 shares vested for DeVries, value realized $9,452,173 (based on closing prices at vest dates) .
Employment Terms
| Term | Provision |
|---|---|
| Agreement & Term | Amended and restated employment agreement (Sept 4, 2018; amended Nov 30, 2018); initial term May 23, 2016–May 23, 2021; auto-renews annually unless notice ≥90 days before expiration |
| Base Salary & Bonus | Base subject to annual review (no decreases); target annual bonus 150% of base (set Feb 2023) |
| LTIP Eligibility | Target long-term incentive equal to 550% of base salary; participates in Omnibus Incentive Plan |
| Severance (non-CIC) | If terminated without Cause/non-renewal or for Good Reason: base salary continuation for up to 24 months; continued health/welfare benefits during severance period; prorated annual bonus based on actual performance, paid with other executives |
| Restrictive Covenants | Non-compete and non-solicit for 24 months post-employment; confidentiality and non-disparagement obligations |
| Change-in-Control | Company-wide “double-trigger” approach to CIC; no excise tax gross-ups; best-net cutback under 280G/4999 to maximize after-tax amount |
| Clawbacks | Dodd-Frank/NYSE-compliant incentive compensation clawback for accounting restatements; additional recoupment policy for fraud/willful misconduct/gross negligence causing material non-compliance |
| Perquisites | Reimbursement of certain housing and work-related travel (up to $100,000 annually) plus tax reimbursement on those perqs; executive physicals . In 2024: $34,200 housing, $32,230 travel, $43,100 tax reimbursement |
| Deferred Compensation | SSRP elective deferrals and company contributions; 2024: employee contributions $120,757, company contributions $256,426; aggregate SSRP balance $2,073,399 |
Board Service, Roles, and Governance
- Board service: Director since 2018; Chairman since 2023; serves on Executive Committee .
- Leadership structure: Combined Chair/CEO; balanced by Lead Independent Director Matthew E. Winter with robust responsibilities (agenda setting, executive sessions, special meetings, shareholder communications, CEO evaluation input) .
- Committee independence: Audit, Compensation, and Nominating & Corporate Governance Committees fully independent; majority independent board (~62%) as of 2025 .
- Meetings and attendance: Board held seven meetings in fiscal 2024; all incumbent directors attended ≥75% of board and committee meetings .
- Governance enhancements: Proposal to declassify the board beginning 2026 and annual elections by 2028; proposal to create stockholder right to call special meetings .
- Apollo influence: Post-controlled-company transition, Apollo retains certain approval rights and director nomination rights tied to ownership thresholds (≥25% approvals; ≥5% nominations) .
Compensation Structure Analysis
- Shift to options-only LTIP in 2024 and 2025 meaning executives realize value only if stock appreciates; indicates higher performance linkage vs prior RSUs .
- Annual bonus tied to two subscriber-model metrics (Adjusted EBITDA and Ending RMR), capped at 200% and floors at 50% threshold; 2024 payout at 95% of target without discretionary adjustments .
- Strong shareholder support: ~99% say-on-pay approval in 2024; peer group refined in October 2024 for 2025 size comparability; compensation benchmarking references market median among selected and broader peers .
- No excise tax gross-ups on CIC; best-net cutback applied; perquisites limited, though tax reimbursements on certain housing/work travel are provided .
Performance & Track Record (Selected)
| Year | Company TSR ($100 initial) | Net Income ($000) | Adjusted EBITDA ($000) |
|---|---|---|---|
| 2020 | 101.0 | (632,193) | 2,147,259 |
| 2021 | 110.0 | (340,820) | 2,101,659 |
| 2022 | 120.70 | 132,663 | 2,305,032 |
| 2023 | 92.8 | 463,009 | 2,481,305 |
| 2024 | 97.0 | 501,053 | 2,578,195 |
Additional 2024 operational highlights under DeVries:
- Record RMR balance; record customer retention; 5% revenue growth .
- Deleveraging ($100 million in 2024 after $2.1 billion in 2023), revolver capacity +$225 million, term loan spread -25 bps .
- 57% dividend increase and $350 million repurchase authorization; $182 million dividends and $241 million buybacks (31 million shares) .
- Product/platform: ADT+ rollout, Trusted Neighbor, AVS-01 national adoption, remote assistance scaling .
Equity Ownership & Alignment (Detailed)
| Component | Amount |
|---|---|
| Vested options beneficially owned | 5,983,345 |
| Common shares beneficially owned | 4,412,056 |
| Total beneficial (Common + vested options) | 10,395,401; 1.3% of Common; 1.2% of total shares |
| Indirect holdings via Bethel Ventures LLC | 3,006,340 shares; 5,983,345 options |
| Unvested RSUs (incl. DEUs) and value at $6.91 close | 809,313; $5,592,353 |
| Performance-based Distributed Shares and payout value | 559,597; $3,866,815 |
| Anti-pledging status | Company policy prohibits pledging; grandfathered pledges (from 2021) allowed; no pledges disclosed for DeVries |
Employment & Contracts (Retention, Transition)
- Auto-renewing term; non-compete and non-solicit for 24 months post-termination; confidentiality and non-disparagement obligations .
- Severance economics if involuntary termination without cause or for good reason: up to 24 months base salary continuation, continued benefits, prorated annual bonus based on actual performance .
- CIC framework: company applies double-trigger design; excise tax best-net cutback; no gross-ups .
Risk Indicators & Red Flags
- Combined Chair/CEO role mitigated by strong Lead Independent Director responsibilities and fully independent key committees .
- Legacy awards modification accounting (deeming performance condition satisfied upon Apollo ownership decline) created reported stock award expense; no new cash grants, but governance optics warrant monitoring .
- Apollo pledging of a large ADT share block under a margin loan introduces potential technical overhang; company is not party to the loan .
- Anti-hedging/short sale/pledging restrictions and clawback policies reduce misalignment risk .
- Say-on-pay ~99% approval indicates low shareholder pay risk in 2024 .
Compensation Peer Group & Shareholder Feedback
- Peer group methodology emphasizes subscription/recurring-revenue, tech-enabled service companies; 2025 peer group updated for size comparability (e.g., Akamai, Brink’s, Equifax, Frontier, Gen Digital, H&R Block, NCR Voyix, NetApp, Rockwell Automation, Rollins, Sirius XM, Telephone and Data Systems, Trimble) .
- Historical say-on-pay: 2024 approval ~99% .
Investment Implications
- Alignment strength: 2024–2025 options-only LTIP and 150% bonus target tied to Adjusted EBITDA and RMR tightly link CEO pay to operating and subscriber-model performance; upcoming RSU vesting tranches (March 2025 and March 2026) plus sizable in-the-money legacy options suggest potential supply events but are managed under strict trading windows and pre-approval .
- Retention and downside protection: 24-month non-compete and severance runway reduce near-term CEO turnover risk; no excise tax gross-ups and clawbacks support shareholder-friendly posture; stock ownership guideline at 6x salary enhances long-term alignment, though compliance status is not disclosed .
- Governance balance: Combined Chair/CEO is offset by robust Lead Independent Director oversight and independent committees; board declassification and special meeting rights proposals further modernize governance; Apollo’s remaining approval/nomination rights and pledged shares are external governance/market structure considerations to monitor .